Wealth management group Kingswood Holdings has launched an Aim IHT and Isa portfolio service.
The discretionary investment management service offers both income and capital growth within a structure designed to mitigate inheritance tax liability after two years.
The launch is in response to clients’ growing inheritance tax needs. Kingwood said that over the past 20 years, a large proportion of people invested in Isas because of the tax benefits, without considering the IHT liability on death.
More than six million of the UK’s circa 22 million Isa investors are now over 65 years old, according to Kingswood, and are faced with the dilemma of either keeping the money in the Isa despite the potential IHT liability or transferring it into an inheritance tax planning vehicle.
While this would reduce IHT liability it would also mean losing control of the assets and waiting several years before the tax liability is mitigated.
Kingswood noted HM Revenue & Customs data shows IHT receipts from April 2022 to December 2022 reached £5.3bn, a £700m rise on the same period a year earlier.
The new service allows clients to keep the tax break of their Isa and, after two years, qualify for 100% IHT relief as well.
With investments in companies listed on the Alternative Investment Market (Aim) the service also means clients can retain control of their investments at all times, the wealth manager said.
Investors will have a portfolio of 25 to 40 companies selected by Kingswood and independently assessed on suitability for business relief, which allows an unlimited amount to be invested at any time and typically becomes IHT-effective after two years.
The portfolio is spread across a variety of investment sectors to provide diversification.
The offering sits within ‘Kingswood Personal’ a bespoke investment management service, which was bolstered by the acquisition of Iboss Asset Management in November 2021.
Paul Surguy, managing director at Kingswood, said: “We recognised the growing need and demand from our clients for estate planning services and built an easy-to-use, speedy solution which simultaneously helps mitigate IHT and target portfolio growth via diversified investments in Aim-listed firms.”
